How do Google cars recognize the traffic signs?
I'm not sure what Google is using to perform that task, but most companies use region based convolutional neural nets to locate traffic signs and other objects.

But other companies use a deep neural network + bag of words approach to find objects.

See: Bag-of-Words Based Deep Neural Network for Image Retrieval which shows a general approach, to get the exact location you can use Feature Matching or Random Boxes.